Retailers losing financially from hoarding returns

Klarna returns retailers

New research from Barclaycard has revealed that retailers are struggling to cope with the volume of refund requests they feel obliged to grant, despite items being unfit for resale. 

A survey of over 2000 consumers by the credit card company has indicated that 57 per cent of retailers grant refunds regardless of product condition to maintain a positive relationship with customers.

Not including faulty or damaged stock, it‘s estimated that 26 per cent of goods refunded are unfit for resale.

This is resulting in stockrooms filling with unsellable items, including products which have clearly been used, are marked, or have parts missing.

As a result retailers are losing out financially, with a 22 per cent introducing a new system to dispose of stock they cannot resell, such as partnering with a reseller or moving the items to a bigger warehouse to store unwanted goods.

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Meanwhile, despite high levels of returns already, consumers still demand more flexibility from the returns process as 39 per cent keep unwanted items because it is too much hassle to return them.

In addition, 37 per cent of retailers admit that they do not offer free returns as a way to discourage shoppers from returning non-faulty items. A further 12 per cent have stopped offering this service because it became too expensive.

“Our research demonstrates that offering a good returns policy can help retailers attract and retain customers,” Barclaycard customer solutions director Sharon Manikon said.

“However, it‘s also crucial to be clear on when customers can and can‘t return items to limit the amount of unsellable stock.

“This will be particularly important in anticipation of major shopping events such as Black Friday, when retailers are likely to see a spike in sales and, subsequently, returns.”

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